A brighter future

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Future Bright, the restaurant-based company whose primary shareholder is local legislator Chan Chak Mo, has seen a 42.9 per cent year-on-year improvement in its results for the first six months of the year, according to its filing with the Hong Kong Stock Exchange.
The company posted a loss of HK$15.7 million for the period, compared with a HK$27.5 million loss the previous year. This was mainly attributed to the group’s food souvenir business, which lost HK$14 million, impairment losses on assets amounting to some HK$1.7 million, and a net fair value loss from the group’s property investment business amounting to some HK$1.7 million.
‘The Group has been able to improve its performance and narrowed down its losses in the Period,’ notes the filing. With regard to sector, Future Bright saw a HK$353.6 million contribution in turnover from its catering business, a 6.3 per cent drop compared to the first six months of 2015. Gross operating profit from food and catering amounted to HK$58.3 million for the six months, a 21 per cent decrease year-on-year; however the sector created HK$1 million in net profit after tax vis-a-vis a HK$32 million loss for the same period in 2015.
‘The Group’s food and catering business continued to face high operating costs […] the Group has decreased its total area of restaurants from 276,986 square feet in the first half of 2015 to 238,523 [in H1 2016] followed by the streamlining of unsatisfactory restaurants and food court counters,’ notes the filing. This decrease in area was primarily due to the closure of a food court in Huafa Mall in Zhuhai last August.
Currently, the group operates 49 restaurants.
Hengqin
In addition, the group noted that its property development project in Hengqin is ‘progressing’, with the soft soil foundation treatment work to be completed soon. However, Future Bright is facing an alleged breach due to a failure to obtain its permit for carrying out foundation works on time, which it claims is due to forces ‘beyond its control’ including a ‘lengthy exchange of views’ between the group and various government departments of the Zhuhai Hengqin New Area regarding building development and design plan. Failure to meet the deadlines ‘may lead to a daily penalty of RMB628,108.11 unless such failure to meet any development milestones is caused by force majeure or government reasons,’ notes the filing. The foundation work drawing plan for the project has been submitted and is pending approval, after which the group can apply for the foundation work permit and proceed with foundation works.